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Home > Ask The Get Out of Debt Experts > I Have AIDS and Disabled But I’m Afraid My SSDI Benefits Are Going to Get Garnished for Student Loan Payments. – Jack

I Have AIDS and Disabled But I’m Afraid My SSDI Benefits Are Going to Get Garnished for Student Loan Payments. – Jack

“Dear Steve,

I have AIDS and can no longer work I owe around $12,000.00 in current and way past due credit card debt. I am on SSDI and can barely pay rent+utilities. I have fought off Capital One and now I hear the feds can garnish my SSDI $$ for student loans. I think I should change phone numbers and quit paying all of it so I can eat and stay warm.

If I just stop paying all the credit cards and change my phone number can the CC co. take my benefits?

Jack”

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The Answer

 

Dear Jack,

Your question is a good one. I had to spend some time looking into it. Probably like a lot of other people I assumed that if you were eligible for Social Security Disability Income (SSDI) that the government would not garnish the very money they gave you to get by for your disability. I was wrong.

Apparently, even though you have been classified as disabled you are still going to have to deal head-on with the Department of Education on your student loan situation. Simply stopping payments or hiding is not going to be the smart way to deal with this.

I found some good information on a Neighborhood Legal Services site.

I have a disability. Can my student loan be forgiven?

It depends. The Department of Education has very high standards for what is considered a disability. Even if you qualify for SSI or SSD, you are not automatically eligible to have your loans discharged.

What is the Department of Education’s standard?

In order for your loan to be forgiven, you must be totally disabled, and the injury or illness must be expected to continue indefinitely or result in death. Even if your condition prevents you from working in your chosen field, you are not considered permanently and totally disabled so long as you can attend school, earn money, or get another job somewhere.

If you were disabled when you took out the loans, your condition must have deteriorated substantially, rendering you permanently and totally disabled.

What if they do find me totally and permanently disabled?

If they decide to forgive your loans, there is some good news for you. Not only do they cancel the unpaid balance and interest of Defense, Direct, and Perkins Loans, but the cancellation applies retroactively, as well. The lender has to return any payments that you made after the date you became certifiably permanently and totally disabled.

The process for making your application to forgive, discharge, or eliminate your student loan obligation to avoid SSDI garnishment is fairly easy.

If you believe you qualify for a disability discharge, you and your doctor must complete, and sign, a discharge application form. You can request this form from the party that holds your loan, or you can download it now. Check a recent demand letter or bill for this loan; if the address to which you are requested to send payment is the National Payment Center in Greenville, TX, you should submit your completed form to:

U.S. Department of Education
P.O. Box 5609
Greenville, Texas 75403-5609

You may request a copy of the discharge application form by calling 1-800-621-3115. Note: in order to guard against fraud, the U.S. Department of Education (Department) will contact your doctor directly to confirm the nature and severity of your disability if you apply for a disability discharge.

To deal with your credit card debt, the best course of action is going to be to legally discharge that debt through bankruptcy. Click here for a free bankruptcy consultation with a local bankruptcy attorney.

Big Hug!

I Have AIDS and Disabled But Im Afraid My SSDI Benefits Are Going to Get Garnished for Student Loan Payments.   Jack
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Tsigili

    Re: Jack’s question about student loans and disability.  It is indeed possible to have your student loans forgiven if you’ve become completely disabled, but be prepared to jump through some hoops and fight for this. Document everything, including the full name of every single person you speak with at every agency (be insistent – if they won’t provide their full names, get their employee ID numbers). Don’t allow yourself to be overwhelmed, just take it step by step. And if you do everything right and you still get screwed, do what I did – call your U.S. Senator.  I provided copies of everything to my Senator’s office, and his staff resolved the problem in less than three weeks. 

    So take heart!  It can be done.

    Tsigili

  • Tsigili

    Re: Jack’s question about student loans and disability.  It is indeed possible to have your student loans forgiven if you’ve become completely disabled, but be prepared to jump through some hoops and fight for this. Document everything, including the full name of every single person you speak with at every agency (be insistent – if they won’t provide their full names, get their employee ID numbers). Don’t allow yourself to be overwhelmed, just take it step by step. And if you do everything right and you still get screwed, do what I did – call your U.S. Senator.  I provided copies of everything to my Senator’s office, and his staff resolved the problem in less than three weeks. 

    So take heart!  It can be done.

    Tsigili

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